KeyBanc Downgrades Lennar (LEN) to Hold; Fully Valued as Risk to Return Supports Patience Near Term

KeyBanc downgraded Lennar (NYSE: LEN) from Buy to Hold.

KeyBanc analyst said, "Lowering our rating on valuation as strong year-end stock performance has brought the companies to the higher end of their recent price to tangible book value. We think optimism tied to the seemingly perennial "spring trade" and positive housing data (HMI Index) is unwarranted with credit cycle fundamentals (foreclosure overhang and weak job growth) set to persist longer than most currently think. We think both LEN and Toll Bros (NYSE: TOL) are "best-in-class" within our framework that favors builders with: 1) a gross margin strategy; 2) low fixed costs; and 3) effective capital deployment, but patience is warranted given only modest equity accretion in 2012 amid our flattish housing demand forecast."

For an analyst ratings summary and ratings history on Lennar click here. For more ratings news on Lennar click here.

Shares of Lennar closed at $19.64 yesterday.

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